AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 761
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.... be applied to ITA No.917/Ahd/2012 also. ITA No.918/Ahd/2012 - in the case of assessee M/s. Yogeshkumar & Co. 3. In this appeal, Revenue has raised following grounds:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 53,74,494/- made by the Assessing Officer in respect of bogus purchases and non-business expenditures. 2. On the facts and circumstances of the case and in law, the learned CIT(A) ought to have upheld the order of the A.O. 3. It is, therefore, prayed to set aside the order of the CIT(A) and restored the order passed by the A.O. 4. The appellant craves leave to add, alter or amend any ground of appeal." 4. Briefly stated facts, as culled out from the records, are that the assessee is a partnership firm engaged in the business of "Commission Agent" for sale and purchase of fruits (Chickoo). During the course of assessment proceedings, on verification of books of accounts, it was noted that the assessee has made maximum purchases in cash through self purchase memos, wherein names and addresses of the parties are not written. The ld. Assessing Officer also observed that the assessee was....
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....o restriction under the State laws it has not shown the income in the name of commission and the same has been incorporated under the head "administrative charges" shown in the profit & loss account. The assessee also submitted that in the audited Trading & Profit & Loss Account, the purchase and sales are shown at equal figures which too proves that the assessee is a commission agent and as far as the transactions in cash are concerned, the same being entered into with the farmers in regard to agricultural produce purchased. However, the ld. Assessing Officer was not convinced with the reply of the assessee and he, relying on the decision of Vijay Proteins Ltd vs. ACIT, 55 TTJ (Ahd) 76, framed assessment by adding 50% of total cash purchase of Rs. 1,07,48,989/- which arrives at a figure of Rs. 53,74,494/- and same was added to the returned income of the assessee and accordingly income was assessed at Rs. 56,22,504/-. 6. Aggrieved the assessee went in appeal before the ld. CIT(A) against the impugned addition of Rs. 53,74,494/- towards the addition on account of bogus purchases and also against the action of the Assessing Officer in making addition without rejecting the books re....
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....ary grievance in all the four grounds of appeal are relating to the action of the ld. CIT(A) in deleting the addition of Rs. 53,74,494/- made by the ld. Assessing Officer in respect of bogus purchases and non-business expenditure. The ld. Departmental Representative submitted that during the course of assessment proceedings, the assessee failed to prove that it is a commission agent, because no details of the principle were furnished neither before the ld. Assessing Officer nor before the ld. CIT(A). Learned Departmental Representative also submitted that onus in relation to proving the genuineness of expenditures made in cash lies on the assessee and the assessee has completely failed on this part to put forth in material evidence proving that the assessee-firm is not a trader but a commission agent. 9. On the other hand ld. Authorized Representative submitted that the assessee is basically a commission agent, dealing with fruits which are highly perishable in nature and they are supposed to be disposed off daily basis to avoid risk of total loss. The ld. Authorized Representative also submitted that all the audited books of accounts were furnished before the ld. Assessing Offi....
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....mission income earned by the assessee and not the sale transactions entered into by the commission agent. 10. We have heard the rival contentions and perused the material on record. The solitary grievance of the Revenue is against the action of the ld. CIT(A) in deleting the addition of Rs. 53,74,494/- made by the ld. Assessing Officer in respect of bogus purchases and non-business expenditures. On going through the record and submissions made before us, we are able to understand that the assessee is dealing in agricultural product, specifically fruits (chickoo) and provisions of Rule 6DD(e) of I.T. Rules apply to the assessee. From the perusal of audited financial statements, we observe that the assessee has shown purchase and sale, both at the same figure of Rs. 1,80,07,848/- and administrative charges of Rs. 13,63,768/- . Similar amount of purchase and sale gives the indication that the assessee is carrying on business as a commission agent and this fact is even accepted by the Assessing Officer also. No defect has been put forth by the ld. Assessing Officer in the financial statements and stock records furnished by the assessee during the course of assessment proceedings and....
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....No.10 which asks about the commission received by the assessee during the year and to our surprise, the amount shown in the current year as well as preceding year is NIL. We also observe from the audited balance-sheet that the inventory at Rs. 2,16,358.79 is appearing under the head "application of funds" but the same figure does not find any place in the audited Trading & Profit & Loss Account and no details are available on record to show as to what is this inventory about, because if it is an inventory, then the assessee is having regular purchase and sale transactions and he may be treated as trader. Further, at the year end, there is an amount of Rs. 54,13,176.52 is payable to farmers which is approximately 30% of the sales and in the balance-sheet under "advance and deposits" a sum of Rs. 39,15,975/- is shown as advance to M/s. Thakorbhai & Co., Amalsad, Navsari. These types of financial transactions raise a question as to whether the assessee has entered into these transactions as a trader of agricultural goods or as a commission agent. We are, therefore, of the view that there are series of questions which remained unanswered in the order of the ld. Assessing Officer and mo....